Despite some significant weather-related price spikes in the Northeast over the New Year's weekend, natural gas prices fell over the report week at most market locations. The Henry Hub price dropped below $3 per MMBtu on Friday and remained there through the balance of the report week to end the week at $2.96 per MMBtu, eleven cents below its value last Wednesday. Frigid weather in the East, contrasted with milder temperatures in other parts of the country, led to a mixed market over the week with little major movement in prices at most locations. The Chicago citygate price declined steadily over the week from $3.16 per MMBtu last Wednesday to $3.05 per MMBtu yesterday. Spot prices at Transcontinental Pipeline's Zone 6 trading point for delivery into New York City, which started the week at $5.85 per MMBtu, climbed to $11.83 per MMBtu on Friday, remained above $10 per MMBtu through Tuesday and then dropped to $4.55 per MMBtu yesterday as a warming trend helped abate the freezing temperatures.
Although increasing only slightly over the week, total supply remained 7.6 percent above year-ago levels, signaling the continued strength in domestic production. Imports from Canada increased overall by 2.3 percent from the previous week, with significant increases in volumes delivered to the Northeast (34.4 percent) according to BENTEK Energy, LLC (Bentek). LNG sendout increased by 19.8 percent over the week, with most of the increase coming from Cove Point, likely to satisfy increased weather-related demand in the East.
Total consumption over the report week was up by 2.5 percent according to Bentek, with the highest increases in residential/commercial consumption, up 3.2 percent. Although residential/commercial consumption dropped through Saturday, it picked up significantly on Sunday, and double digit percentage increases were registered on Monday and Tuesday. By Wednesday, demand had begun to drop off, consistent with the weather pattern in the East over the week.
At the NYMEX, the February 2012 contract posted a small decline over the report week, falling from $3.121 per MMBtu last Wednesday to $3.096 per MMBtu yesterday. The contract price fell below $3 per MMBtu over the Holiday weekend, but moved back above the $3 per MMBtu benchmark yesterday. The 12-month strip (the average of the 12 contracts between February 2012 and January 2013) followed a slightly different pattern, declining only slightly during the week and rising overall for the week from $3.348 per MMBtu last Wednesday to $3.400 per MMBtu yesterday.